Owning the Future

Owning the Future

Article excerpt

Owning the Future

by Seth Shulman

Houghton Mifflin Company * 1999 * 240 pages

*$25.00

Reviewed by Joseph S. Fulda

A book about high technology and the patent system might not engender expectations of captivating reading, but this book commands all the reader's attention from start to finish. It is a masterpiece, elegantly written, well researched, and brought to life with the many vivid case studies that form the bulk of the book.

Based on Shulman's amazing breadth of knowledge and on a wide variety of both journalistic and scholarly sources, interviews, press releases, and materials available on the Internet, this book is also remarkable for its range: It covers medical and surgical procedures (including gene therapies), pharmaceuticals, plant and animal varieties, agricultural genetic engineering, computer software, and computer databases-all in depth and in a mere 191 pages (plus bibliographic notes and an index).

What concerns Shulman in each of these domains are, to quote computer specialist Richard Stallman, first, invalid patents, and second, valid patents. The Patent and Trademark Office (PTO) has moved away from the venerable dictum that an idea cannot be patented, a move presaged by the 1870 abolition of the requirement that physical models be built and submitted with each application, to granting patents freely to ideas with mere hints of utility in the future. Notorious among these are patents for algorithms-laws of nature that are not patentable subject mattercleverly disguised as implementations, while the rights that are actually awarded extend to all applications, present and future, of the algorithm.

The PTO has also long been issuing extremely overbroad patents in other knowledgebased areas-most of which would not stand up if challenged in a process that costs millions of dollars and that many small companies find unaffordable. Finally, patents are issued in all those fields where there is substantial "prior art" that has somehow escaped publication or the notice of the examiners: Many of these, too, would not withstand judicial scrutiny. But whether valid or invalid, patent holders build large portfolios of patented ideas (IBM holds thousands upon thousands!) and then extort royalties from companies seeking to use well-known ideas whose utility was only hinted at in the original patent application or which were not a part of the original conception. Shulman's well-justified fear is the shrinking of the public domain, as the use of ideas must increasingly be licensed from patent holders.

Most large biotechnology and computer companies have large patent portfolios-and never mind that many of the patents are worthless-which are used not only to extract royalties but also defensively against other holders of vital patents who would otherwise demand royalties and now settle for crosslicensing arrangements, and preventatively so that other similarly situated companies are prevented from acquiring ownership of this intellectual capital. …